Cracking the Horse Racing Code: A Billionaire's Quant Strategy

This article delves into the remarkable story of Bill Benter and his $1B fortune amassed from Hong Kong horse racing, as detailed in "The Gambler Who Cracked the Horse-Racing Code." Benter's 1994 paper, "Computer Based Horse Race Handicapping and Wagering Systems: A Report," documented a successful betting model, though likely outdated upon publication. The paper offers valuable insight into applying mathematics to horse racing, particularly given the era's hardware and software limitations. This post presents an annotated version of the paper, including code and commentary. It analyzes model calibration, improvements in public odds estimates over decades (1986-1993, 1996-2003, 2006-2013, 2016-2023), and recreates adjustment factor fitting using PyTorch.